Please show your work step by step.
Chapter 7 Demonstration Problem #2 Galaxy Lighting Company manufactures and sells lighting fixtures. Galaxy is preparing budgets for the quarter ending December 31, 2016. Sales budget information: Estimated units sales for the next five months are as follows. Each light fixture sells for $50.00 per unit. Budgeted sales: September October November December January Sales Units 4.000 3,000 6,000 4,000 8,000 Production budget information: The company maintains and end-of-month inventory of 1,000 units plus 10% of next month's unit expected sales Assume that beginning inventory amounts (for October) followed the same rule as that planned for ending inventory in the current quarter). Materials purchases budget information: Five units of material are required for each light fixture that is produced, Galaxy wants to have materials on hand at the end of each month equal to 15 percent of the following month's material needs. Assume that beginning inventory amounts (for October) followed the same rule as that planned for ending inventory (in the current quarter). January production is budgeted for 6,000 units. Cash payments for materials purchases information: The purchase cost per unit of material is S2. Generally, 30% of materials purchases are due and payable in the month of purchase with the remainder due the following month. September purchases paid for in October are expected to equal $26,185. Required: 1. Prepare a sales budget for the last three months of 2016. 2. Prepare a production budget for the last three months of 2016. 3. Prepare a materials purchases budget for the last three months of 2016. 4. Prepare a cash payments for materials purchases budget for the last three months of 2016 and determine what the Galaxy's expected accounts payable balance will be at December 31. ***Templates have been provided on the next page Sales Budget October November December Budgeted sales in units * Price per unit - Projected sales revenue Production Budget October November December Budgeted product sales in units + Desired product units in ending inventory - Total product units needed Product units in beginning inventory - Product units to produce November December Material Purchases Budget October Product units to produce x Units of material needed per unit produced - Material needed for units to produce + Desired units of material in ending inventory - Total units of material needed - Units of material in beginning inventory = Units of material to purchase Cash Payments for Material Purchases October November December Material purchases (units) x Material cost per unit = Total cost of purchase September accounts payable October purchases November purchases December purchases Total payments in month What is Galaxy's accounts payable balance at December 31
